Figma Stock Tumbles After IPO: Should Investors Buy the Dip?

Figma's stock has fallen from $120 to $70 per share since its IPO. Despite impressive financials, with $821 million in revenue and a 91% gross margin, the company's target audience has been captured, and it trades at a premium. Investors might be better off waiting for a more attractive entry point rather than buying the dip.

Figma Inc. (NYSE: FIG), the design and product development platform, has seen its stock price drop from a high of $142.92 to around $70 since its initial public offering (IPO) in early July 2025. Despite impressive financials, with $821 million in revenue and a 91% gross margin, the company's stock has faced mixed analyst sentiments, with most ratings falling to Neutral or Perform due to concerns over valuation.

Analysts from RBC Capital Markets and Morgan Stanley initiated coverage with Sector Perform and Equal-weight ratings, respectively, setting price targets of $75 and $80. RBC highlighted Figma's strong user base, with over 13 million monthly active users and 450,000 paid customers, including 95% of Fortune 500 companies. Morgan Stanley noted the platform's potential to expand its penetration into the estimated $26 billion total addressable market (TAM) [1].

However, Bank of America and J.P. Morgan initiated coverage with Neutral ratings and lower price targets of $85 and $65, respectively, citing concerns over valuation. Goldman Sachs also initiated coverage with a Neutral rating but assigned the most bearish price target at $48, citing limited visibility into Figma's near-term growth drivers and a relatively full valuation [1].

Adobe Inc. (NASDAQ: ADBE), a leading global technology company, has also seen its stock downgraded by Melius Research due to AI threats and increased competition from Figma's IPO [2]. Despite this, Adobe exceeded Wall Street estimates in its fiscal second quarter of 2025, posting $5.87 billion in revenue, a 10.62% year-over-year increase [2].

Figma's strong AI integration, such as Figma Make and FigJam AI, has been noted as a potential tailwind for the company. However, analysts caution that the aggressive investments in AI could pressure gross margins in the near term [1].

Figma is scheduled to release its second quarter financial results on September 3, 2025, where investors will be closely watching for its business outlook for the third quarter and the full-year period [3].

References:
[1] https://seekingalpha.com/news/4488706-figmas-platform-impresses-analysts-but-most-initiate-at-neutral-due-to-valuation
[2] https://www.ainvest.com/news/adobe-downgraded-sell-ai-competition-figma-ipo-threat-2508/
[3] https://ca.finance.yahoo.com/news/figma-fig-drops-profit-taking-161758834.html